How Can Businesses Overcome Subscription Fatigue?

In the post-pandemic era, subscription fatigue has become an increasingly prevalent issue for businesses to address. In a world where subscription revenue models are being introduced to, well, everything – from your typical streaming services and meal kits to cruise control and climate control features in Audis – it makes sense that consumers are frustrated and overwhelmed when determining which subscriptions are truly necessary.

The subscription revenue model grew significantly during the COVID-19 pandemic and for several years afterwards. But now, industry leaders and analysts believe that this era of unprecedented growth is nearing its end. According to research firm YouGov’s Justin Marshall:

“Unsubscribing rates were high last year – and there’s a looming threat of even more… the proportion of people who plan to cancel in the future sits at a concerning 8 points above the figure of cancellations in the past year.”

A Civic Science survey of video service subscribers found that 50% of respondents either cancelled or intended to cancel one or more subscriptions in 2023 due to subscription fatigue. Consumer discontent regarding the widespread use of subscription revenue models has even reached the White House, with the Biden-Harris administration recently announcing new proposals to make cancelling subscriptions easier.

The point here is simple: people are getting tired of subscriptions! So why do consumers feel this way, and how can businesses adapt to mitigate subscription fatigue? 

Why do Consumers Feel Subscription Fatigue?

Consumers are feeling subscription fatigue for numerous reasons, including:

      A General Increase in Financial Strain

      It’s no secret that inflation is impacting the way that consumers manage their subscriptions. According to a Bankrate analysis of Bureau of Labor Statistics data, consumer prices have increased by 20.8% since February 2020. Subscribers have less discretionary spending power than they’ve had in previous years, and this impacts which subscriptions they deem important enough to keep.

      Substantial Price Increases, Same Old Product

      Consumers are frustrated with companies increasing subscription prices without adding any value to their products! In 2024 alone, Netflix raised their Basic and Premium subscription plan prices by 15 and 20%, respectively (which equates to an increase of $24 or $36 per year!). Spotify has increased prices for all their plans by 20-30% - Spotify Family is now $19.99 a month (increased from $16.99/month). When consumers are already feeling the burden of inflation, paying a substantially higher price for the same service is hard to justify. 

     Growing Frustration with Difficult Cancellation Policies

     Difficult cancellation policies have become so widespread that almost everyone has a frustrating story to tell about cancelling a subscription. While subscriptions are hard to cancel and easy to forget by design, some companies (such as music streaming service SiriusXM, for example) take it a step further with anti-consumer practices that alienate cancelling subscribers from re-engaging in the future. Difficult cancellation policies may increase revenue in the short term, but they are disliked by customers and discourage customer re-engagement.

How do Businesses Adapt to Subscription Fatigue?

While people are becoming increasingly fatigued with subscriptions, businesses are experimenting with different ways to keep consumers subscribed and engaged. Specifically in the publishing industry, The New York Times and The Forward serve as two examples of publishers that have adapted successfully to this new era using very different strategies.

Case 1: The New York Times

During 2023, The New York Times was able to push their annual revenue for digital subscriptions above $1 billion for the first time by bundling their core news product with other digital components such as Wirecutter, their product review site, or The Athletic, their sports news site. Recognizing the broad appeal of their non-news products, NYTimes has attracted swaths of new subscribers by offering high-value bundles at affordable discounted rates.

Here at AdvantageCS, our Advantage subscription management software allows businesses to bundle various print, digital, and product items together in the same way. Click here to learn more about our flexible subscription management software!  

Case 2: The Forward

In December 2023, four years after the publication’s transition to digital-only, the Forward decided to remove their paywall to move to a donation and gift-based revenue model. This move was a great success – from December 2023 to March 2024, the Forward received nearly $583k in donations under $5k – a 37% increase over total paid subscription revenue during the same time from the previous year! By recognizing both the widespread demand for high-quality information and consumer willingness to pay for it, the Forward is able to succeed as a free, digital-only news publication while offering donors special perks and access.

Even though they drastically changed their business’s core revenue model, the Forward still needed a CRM to manage donations, track donor information, and grant special access accordingly. Advantage is a flexible subscription management platform which has all of these capabilities and more! We offer effective subscription management features centered around customer retention including discounting options, loyalty programs, and customer communications (to name a few examples). Click here to learn more!

Conclusion

In the subscription management industry, it’s becoming increasingly clear that the COVID-19 era of unprecedented subscription growth is nearing its end. Subscription fatigue is becoming more and more prevalent among consumers for a myriad of reasons. People are increasingly disciplined when choosing which subscriptions to keep or cancel.

At AdvantageCS, we recognize that businesses need to utilize different subscription models and marketing strategies to adapt their offerings to match consumer demands. The Advantage subscription management platform provides businesses with the flexibility they need to cater their product offerings for their niche.

Contact us today to find out what we can do to help your organization combat subscription fatigue!